How Does a Lack of Finality Impact the Settlement Process for a Crypto Derivatives Contract?

A lack of absolute finality introduces settlement risk. If the underlying asset's transaction used for settlement is later reversed due to a chain reorg (malicious or otherwise), the entire derivatives contract settlement is compromised.

The exchange or clearinghouse would face uncertainty regarding the true price and ownership, potentially leading to disputes, financial losses, and a need to unwind or re-settle the contract, which is operationally complex and risky.